Anyone working for more than ten years has probably daydreamed about retiring early. But everything is relative, and 35-year-olds are going to have a different definition than a 45-year-old. And what exactly is retirement anyway? Does that mean switching jobs, or completely checking out of the working world?

In this article, we're going to unveil the vision of early retirement. We'll talk about what it means to retire early, as well as its risks. Then we'll outline some approaches individuals can take to achieve this vision. Finally, we'll talk about some online tools you can use to create retirement "what if?" scenarios.

The vision some of us have of early retirement is clear. We know exactly what it means, and how it's going to feel. We know why we want to do it, and how we'll fill our days. Others might not have such a clear vision. They may be frustrated with work, or just plain tired of the daily grind.

Saving Money

Whether we have a clear vision of early retirement or not, one thing is clear. Money is one of the keys to making this vision come true. We live in a material world, and we need money to survive. Shelter, clothing, food, and many of the other basics we need to survive are not free. So a big part of our early retirement plan will involve saving money.

The next logical question someone might ask then becomes:

How much money do we need to retire early?

It's an excellent question, but one that we need to examine before we can start to answer it.

Financial Independence

For many of us, retiring is thought to be synonymous with the concept of financial independence. That's because a successful retirement is often predicated on one's ability to avoid working, and still be able to pay our monthly bills.

That's not to say that everyone who is retired has reached a point where he or she is financially independent. And to the contrary, reaching a state of financial independence does not mean one must retire.

If we're going to help define what it takes to retire early, then financial independence is one of the key elements in achieving that vision. Later on, we're going to rely on mathematical formulas that will outline how much we need to save to pay our bills as well as provide for a lifestyle we're hoping to live.

Adjusting Lifestyles

It's possible to accelerate our retirement timeline if we're willing to adjust our lifestyle. Ideally, we'd want all of our major expenses behind us or fully funded. This includes life events such as paying for weddings and college costs. It's also a good idea to retire and leave our mortgage payments behind.

Relocating to a state that doesn't require its residents to pay state-level income taxes. There are currently seven states that do not collect any state income taxes: Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming.

Taking Risks

One of the biggest risks retirees face is outliving their retirement funds. We all wish we could be so lucky - beating the odds, living a long life, and running out of money.

But unless we're willing to go back to work, a sound retirement plan does not include seeking above-average returns on our investments by taking big risks. Taking a conservative approach to investments will allow us to ride-out economic storms and bear stock markets.

One tactic used by many individuals as they approach their retirement age target is to start moving money away from riskier investments (such as stocks) and into a more secure portfolio of government-backed bonds or banking instruments such as certificates of deposit.

Unfortunately, this planning approach is frequently misunderstood by the same individuals attempting to follow its guidance. More money is moved into this conservative portfolio than is necessary, and the investor's return suffers.

Financial planners typically recommend that a retirement portfolio hold two to three years worth of living expenses in cash, CDs, and short-term bonds. This money is usually sufficient to see someone through a stock market decline. The last thing anyone wants to do is sell stocks in a down market.

Working in Retirement

One of the ways we can retire early is by working in retirement. Here we're talking about "downsizing" our job to a less stressful assignment. Taking a part time job, or working at home, may be the ideal way to supplement traditional sources of income.

The key to knowing if we need to supplement our income is by crunching through some numbers, and working through some what-if scenarios.

Online Retirement Tools

At the time of this writing, this website offered over 90 online calculators. The majority of these calculators were engineered to help answer questions related to financial matters. In fact, we've broken these calculators down into the following categories:

Loans: anyone thinking about paying off a loan, consolidating your loans, or paying down a credit card, should look through this section of the website.

Mortgage: if a retirement decision involves a mortgage, there are nearly 20 calculators designed to help answer every imaginable question.

Retirement: finally, we've put together two dozen retirement calculators that can help figure out exactly how much money is needed, as well as how much money to save to fulfill a dream of retiring early.